For the first time, the average price of a home is now over $250,000 and the median price of a home is more than $200,000, according to a report released by the Denver-based Perry & Butler Realty Inc.
And a report by the Genesis Group of Denver, which has tracked new and used home sales since 1996, shows affordability is at its lowest level in four years. It is almost certain that the average price of homes has never been this high.
"Wages have gone up, but certainly not as fast as home prices," says Patty Silverstein, chief economist for the Metro Denver Chamber of Commerce and principal of Development ResearchPartners. Indeed, another report shows housing prices have risen 115% from 1991 to 1999 while wages have gone up only 67%.
The Genesis Group says the least affordable areas for single-family homes are Boulder and Denver. While overall, median income buyers had 3% more income needed to buy the median-priced single family home, that was not the case in either Boulder or Denver.In Boulder, a prospective buyer with a median income had a salary 22% less than what is needed to buy a median-priced home; Denver residents would need an 18% raise to buy a median-priced home.
"This really hurts economic development efforts to attract and retain employees," Silverstein says. "In the '80s, one of our big advantages was that we had low-priced houses and that helped convince employers to locate and expand here. Clearly, we're not a cheap housing market anymore."
On the other hand, Silverstein notes metro Denver isn't alone in its battle against skyrocketing housing prices and higher mortgage rates - a factor that has helped even the playing field in competition against cities with a similar quality of life.
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